Finances

03/25/2017

About a decade ago, I had recently sold my parents’ home. It had been paid off for years and so the proceeds were entirely profit. I had the better part of a million dollars in the bank.

Other than that, my life was a mess. I had many health problems, I was entangled in a legal issue that threatened to curtail my freedom and I was in a loveless marriage that was disintegrating. I feared that the proceeds from my parents’ home would become fair game for my wife’s lawyer once we began divorce proceedings.

Based on the dollar amount in my bank account, I could buy any car I wanted, I could take multiple trips around the world, I could relocate to a tropical island and live like a king for the rest of my life. But, given the reality of my health and legal problems, I was forced to stand and fight for my future. And as it turned out, much of the money did in fact go to satisfy legal issues, to pay for divorce settlements and to cover my living expenses during that time when I was too encumbered by such problems to hold down a job. I managed to save enough to put a down payment on a home.

I now live on a fixed income, but I have learned to manage my money in such a way that I can live as I please and even set aside money for travel. I am in a wonderful relationship, stay busy with creative projects and gardening. I am happier than I have ever been and it has nothing to do with how much money I have.

The point here is, when one aspect of a person’s life is viewed out of context, it distorts the reality of their actual experience.

Here is a general rule about money and happiness that applies to all of humanity

"It is essential to have just enough money to not worry about how bills will be paid or how to keep our belies full".

Below that line, stress and worry rob us of the emotional freedom to be happy. Above that line, other less tangible qualities like attitude, health, relationships, work satisfaction and self esteem begin to play a larger role in our overall life satisfaction”.

I have known several millionaires and many with 6 figure incomes. Here is what I have observed:

• They continue to work in spite of having plenty of money. Why? Because a healthy human spirit seeks opportunities for achievement and recognition. They need a purpose; a reason to get up in the morning and be useful or of value to others.

• They question whether friends are sincere, or just hoping some of that wealth will rub off on them. So they often associate with other rich people who don’t need their money. But those relationships are often shallow and superficial.

• Satisfying relationships often elude them. Wealth often creates dangerous liaisons. Wealthy persons are constantly approached by attractive interlopers, seeking a ride on their coat tails. These “gold diggers” can be very seductive, feigning affection while developing long-term plans to feather their nest at the expense of others. Money brings all kinds of young and beautiful people into your sphere that may not have the best of intentions.

• They struggle with how to raise their children. Should the spoil them with free tuition, cars, travel and homes, or compel them build character through tough love, by motivating them to learn the skills and discipline necessary to succeed on their own?

Here is the philosophy I live by with regard to money and happiness:

Rather than worrying about creating ever larger pot of financial resources, learn to live well within the resources you have. Chances are you’ll sleep better, have stronger, more meaningful relationships, higher quality children, more sincere friendships and ultimately a happier life than many who are burdened by heavier wallets.

04/10/2015

Unlike animals, humans seek improvement in their lives. We are not content to just eat, sleep and procreate, we wish for things like a bigger home, greater comfort, more conveniences, travel, a bright future for our children and a secure retirement for ourselves. And while managing money can be one important part of reaching our goals there are other equally critical habits that enhance your chances for success.

Planning - Hope and Goals go hand in hand. Hope is a unique feature of human consciousness that allows us to envision a better day and goals are the stepping stones we create to get us there.

But hope and goals are not enough in and of themselves to manifest a dream, they need to be integrated into a plan, which provides a scaffolding, holding everything in place and allowing us to visualize how each element is interrelated and what path we will need to take to ascend from one goal to the next .

Planning is like an art: a process which always demands improvement by way of practice. That's why it's useful to always have some kind of plan that you're working on, so that you can remain fluid in the dance and with little effort, accomplish what may seem impossible to others.

Be willing to let your mind wander - Thomas Edison said "Genius is one percent inspiration and ninety-nine percent perspiration", but my experience has been somewhat different. I've noticed that when I have a goal, I spend a lot of time in my mind running through the steps necessary to accomplish it. This process involves several different types of thinking and they occur in no particular order.

Visualizing the completion of the goal: What will it look like, feel like, how will it make my life better?

Imagining possible methods for accomplishing the goal: Are there economic or logistical limitations? How might you overcome those to arrive at the best result given the resources available?

Support working concepts with some empirical data: Depending on the nature of your goal, you may need to get out a tape measure and or a calculator, do some internet research or make some phone calls to get information. And because the mind is so busy with other things, at some point, facts and figures will need to be committed to paper or some type of digital medium; something you can refer back to as you refine your plan.

Don't be afraid to move ideas around: Shift the placement of ideas or eliminate them all together as new information becomes available. Allow your mind to be like a stage or laboratory, where different scenarios are considered and eliminated or tested and refined. Eventually, the right combination of solutions will emerge at which point, the task will come more clearly into view and seem suddenly more manageable.

Organization and Commitment - These are two essential qualities of character you must develop if you hope to create and execute plans in a timely manner.

Organization: Because life pulls us in so many directions at once, it's necessary to prioritize what is most important at any given time, focus on it to completion and then put it out of our mind. Knowing that other personal or business responsibilities are currently under control allows you to set aside blocks of time to work on reaching your goals. Also, keeping your project organized means you'll be less likely to lose essential tools, or be slowed down by having to correct a big problem that could have been handled much more easily early on.

Commitment: Committing to your goal means you'll create the necessary energy and enthusiasm to continue working on it, even when you may not want to. Each moment seduces us in one direction or another, either to play or engage in some other kind of distraction. Commitment is a promise we make to ourselves to not procrastinate and remain focused on accomplishing our objectives. This is where maintaining a mental picture of your goal completed helps to inspire you to stay motivated and fight inertia.

"The Perfect is the Enemy of the Good"

So admonished Voltaire. And it is a truth of the human condition that we often seek the perfect time, the perfect mindset, the perfect tools, the perfect knowledge and so on before we feel prepared to embark on a new goal or adventure. Meaning ultimately, that nothing gets done, because perfection in anything is unattainable.

One way in which this counterproductive obsession with perfection takes shape is assuming one has to be an expert before he can start a project. This is a classic "Catch 22" situation, because how can you become an expert in anything if you haven't already done it?

That is not to say that you should leap, half-cocked into a project without preparation and forethought: that is an almost certain recipe for failure. But the happy medium emerges when you prepare yourself as best you can and then proceed cautiously, taking small risks, making mistakes, correcting them as quickly and effectively as possible and continuing.

Experts rarely innovate. Rather, they bask in their "expert-ness" and become irrelevant. Innovations are made by people who are either unaware of the excepted protocol or willing to experiment beyond it, as a child would.

Do you lack the perfect wisdom or the perfect amount of money to do something? Fine, then figure out a different way to do it. One that allows you to proceed with the resources you have.

Never assume that the accepted way is the best way. "The best" of anything is always subject to redefinition.

-S.E. Mathias

I would love to know if you enjoyed this article, how it may have helped you, what country you are living in and what aspects of happiness and successful living you might like me to write about.

You can contact me via email find me on Facebook or Tweet me on Twitter. Please feel free to pass along a link to my blog to your friends and family and check back frequently for fresh, enlightening posts on Sustainable Happiness

2 out of 3 Americans have not seen any rebound in their finances since the recession supposedly ended.

Only 1 in 4 expects the economy to get any better.

And for recent college graduates, the outlook is even worse: many will have to continue living with parents or move back in. Additionally, they are saddled with school debts, work 2 or 3 jobs and have little hope of ever buying a home or starting a family.

So, with that depressing look at how the overall economy is effecting people's lives, how can you avoid becoming a statistic, unable to keep your head above water and having little optimism about the future?

You Need a Plan

Hardship can actually begin the practicing of habits that make sense anyway and that last a lifetime. Here are some tips that can pay big dividends year after year, saving you thousands and helping you achieve your goals regardless of what the economy does:

1. Take care of your vehicles - The cost of purchasing of a vehicle is only exceeded by education and housing in terms of it's impact on a family's budget. When you do buy a car, resist the temptation to buy new or purchase on credit. Shop around for a certified used vehicle or buy a gently driven unit from a trusted friend or family member, then take great care of it. Do your research to determine which is likely to last and require the least amount of maintenance. Japanese cars and trucks still have a huge edge over American or European models, lasting decades and still purring like kittens after half a million miles, with very few mechanical problems. Change oil regularly, keep tires rotated and inflated to optimal pressure, protect the paint and interior with sun protection and surface treatments, do the regularly scheduled maintenance and your car will reward you with loyalty and years of great service.

You may believe you only have enough to survive on, with nothing left over, but chances are, financial commitments that you have chosen have eroded your expendable income and caused you to spend every penny you earn. For an example: are you really watching Showtime and HBO? How about that timeshare in Florida, when was the last time you went? How much do you spend at Starbucks each month for that latte you grab on your way to work? The gym membership you rarely use, the TV that stays on all night, the magazine subscription, shopping at Whole Foods rather than Walmart, grabbing dinner out 2-3 times a week, the bar tab you run at your local pub every weekend and on and on. I'm not saying you shouldn't have fun, by all means, you should. But do so thoughtfully.

Consider making different choices to save money - Rent movies at Redbox when you have time to watch, rather than spending $30 per month on premium channels that run 24 hours, look for travel deals that fit your budget and schedule, rather than making a timeshare company rich, make coffee at home, even buy a reasonably priced espresso machine if you have to have foam with your java, find free activities to do for exercise, such as hiking and biking rather than paying a gym to keep its lights on when you're not there.

Familiarize yourself with less expensive options for food, clothing and housewares. Chances are, you developed habits, when times were better, of shopping at upscale stores and never investigated Walmart, Ross, the Dollar stores and so on. Its no longer the refuge for the dregs of society, lots of middle class and former middle class people shop at discount stores. They are bright, clean and inviting and worth checking out. You will save lots! But I caution you against getting a Costco membership, and if you already have one, heed my warning. You can get a great deal on 55 gallons of dish soap, but it makes no sense to buy way more than you need of something to save a few dollars? And while you are there, you may decide you just cannot live without that 60" flat screen. See my point?

Buy good quality food, at the best possible price - In Europe, the average family spends 25% of their budget on food. They are generally healthier and happier than Americans. In the U.S. we spend barely 20% of our income at the grocery store and our diets are horrible. Cans, boxes, bags and bottles, full of fatty, sugary concoctions that promote heart disease, diabetes and maybe even cancer and Alzheimer's. We are willing pawns of a food industry that continues to peddle cheap empty calories as nutrition and it's costing us every day in wasted money and health. Spend a little bit more and learn how to cook at home, with vegetables, quality meats, whole grains, fruits and legumes. Do research online to discover recipes that your family will enjoy in place of the sweet tasting junk they're use to. Don't let the picky kids determine what the whole family will eat. Serve what's healthy and when they become hungry enough, they will eat it. That's the only way they will develop good eating habits and frankly, you couldn't be giving them a better gift for a long, healthy life.

Keep track of your expenses - For years, I have maintained an Excel spreadsheet. Now that I am an Apple computer devotee, I have just converted that Microsoft file to Google Docs and it works just fine. I keep every receipt and several times a week, I subtract what I spent from my bank register and also post it on to my spreadsheet in one of 20 or so categories I have created, such as: Food; Entertainment; Gasoline; Prescriptions; Clothing and so on. I do the same for my bills and then, I have a running record of how efficiently I am living. From one month to the next, I can see if the cost for gasoline, food, entertainment and so on has spiraled out of control. I may be able to tie that to an unavoidable event, such as driving to a relatives funeral in another state, or having to replace a washer, whatever. But, I can also see if my habits are beginning to cost me money and I can reign in my spending by altering my activities.

If you would like to receive an executable spreadsheet that you can customize for your own use, let me know and I will send it to you for free!

Good insurance is worth the money - When I was run into by an unlicensed driver, earlier this year, my auto insurance company returned my car to me in better condition than before the accident. When my central air conditioning compressor (a $3000 item), died on me in the middle of Summer, my home owners insurance replaced it with a new unit. My deductible? $75. When I needed emergency surgery, my health insurance paid 100% of the cost. And now, for $35 a month, I have a security system on my home to deter crime and alert police if my home is broken into. When life happens, be prepared. It may seem senseless to pay every month for insurance you don't use, but the total cost of those payments will pale in comparison to what you will save, when you are in a crisis. Again, shop around for the best deal.

Consider solar energy for your home - My electric bill can be as much as $250 a month, due to air conditioning costs. What's more, is that the energy company will incrementally increase the cost of each unit of electricity by about 7% or more every year, for the foreseeable future. With my new solar system, which I lease, I my electric bill will only be $116 per month (the cost of the lease), every month, next 20 years, because my solar system will generate sufficient electricity to offset any additional costs. That's right, my electric bill will never rise above $116, regardless of how much energy I use. The leasing company is responsible for maintaining the system to ensure it runs efficiently, because they are contractually obligated to cover the cost of any electricity I do not produce due to poor performance. There are still Federal rebates available, which result in no out of pocket costs, making this a no brainer if you own your home and have good sun exposure.

Write to me if you'd like to learn more about solar.

Finally, if you own a home, consider refinancing - Historically low interest rates are still available on 15 and 30 year loans. When these rates are gone, and surely they will go some day, we will not likely see them again in our lifetimes. Act now, while you still can.

Conclusion: There are thousands of dollars you are probably wasting every year, just through the choices you are making. Dedicate yourself to socking away $$ every month in a savings plan and carefully evaluate all of your expenditures, no matter how seemingly insignificant. A dozen or more seemingly insignificant expenses, multiplied by 365 days a year can really add up.

07/25/2014

If this has been an ongoing issue for you, you have lots of company! Clay tokens inscribed with cuniform symbols, dating back to 4000 B.C.E. were used by the Sumerians to keep track of grain sales and other transactions.

Since then, our record keeping has pogressed quite a bit, but our struggles with money are pretty much the same. The reason most often given for the failure of marriages is disagreement over finances.

In fact, I could sit here day and night for a year, writing about money and still not fully address all it's complexities. So what can be said here in a few paragraphs that can be of any help at all? Wait…I'm thinking.

Okay, let's try this:

Savings - The world is an uncertain place, and as such, you need to have insurance in the form of savings to handle unexpected developments, such a losing a job, health problems, automotive repairs and the like. We have insurance for so many other things, even life insurance to take care of our families after we're gone, but, ironically, we don't think of much more likely emergencies cropping and how we might handle them. So find a way to set aside as much as you can, preferably in a savings account, rather than cash, which is too easy to pilfer when temptation arises. A different saving account can be used to save for desires, like a cruise or a new car. But make sure not to mix or or dip into your emergency fund. It will provide peace of mind and a true lifeline when life takes an unexpected turn.

Credit - This is what gets most people into trouble; it's just too easy to use and then postpone the pain of repayment into the future. If you are disciplined enough to use a credit card, for example, and pay it within 30 days, before interest accrues, you are a rare individual indeed and can probably use credit safely. But for the rest of us, credit is another way for banks to get rich off of our hard earned money, using the psychology of "out of sight, out of mind" to their advantage. And the interest that is charged, if not paid off in a timely fashion, will compound and can actually exceed the amount of the original charge, in which case, you will be paying more than twice for the service or item you originally purchased. Not too smart! Right?

My advice: carry a credit card for emergencies and forget it. If you do use it, pay off the balance as soon as possible, so as not to accrue interest on the purchase. Some other types of credit are necessary, such as that used to buy a home or to replace an old vehicle. But really examine your long term income prospects and existing debt to ensure you will be able to afford the additional monthly expense. If not, better to wait, save what you can and develop a plan to achieve your goals in the future.

Debit cards - I have found that this is the most efficient way for me to manage my money. I keep track of what's in my bank account and how much I have to spend. I know I cannot spend more than I have, therefore, I will not be accruing any debt. The disadvantage of a debt card, relative to a credit card, is that if it is stolen and used to purchase items without your consent, you may lose the money in your bank account for good, especially if you don't report the missing card and or the unauthorized charges immediately. Credit cards on the other hand are initially using the bank's money and if the card is stolen or misused, the bank can begin an investigation to determine if a crime was committed. If so, you will not be held responsible. But remember, credit cards carry the potential of being able to accumulate your purchases, which can easily snowball out of control. So be careful!

Money problems have the potential to ruin your happiness and sense of control over your destiny. So treat your money as you would any valuable relationship, with care, forethought and consistency. If you become depressed because you can't have what you want, when you want it; remember, most of the world's population has trouble meeting their basic needs for food, shelter and medical care. If you have those covered, you are doing better than you think. Be grateful and develop a plan to achieve your goals, through discipline and thoughtful choices.

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I’d read one book about
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